DoT in favour of waiving spectrum bank guarantees, move to help Vodafone Idea

The Department of Telecom (DoT) has taken a favourable view on waiving bank guarantees telcos owed for buying spectrum up to 2022. The move is expected to largely benefit Vodafone Idea, which needs to secure bank guarantees worth ₹27,000 crore in the coming months, people aware of the ongoing discussion told Moneycontrol on condition of anonymity.

“There is an alignment between the industry’s demand and the telecom department, except for a few issues that are expected to be ironed out soon, and the department is working on the same,” one of the sources told Moneycontrol.

A second source close to the development noted that there was room for relief, as the 2024 auction did not require bank guarantees after new rules were introduced in 2021 as part of a reforms package. The department has been actively engaging with telecom operators on the issue, they added.

In August, the Cellular Operators Association of India (COAI), a representative body for telecom operators, wrote to Telecom Secretary Neeraj Miital, advocating the removal of bank guarantee (BG) requirements for auctions conducted before 2022.

COAI argued that this change would improve the cash flow for telcos, allowing them to invest more in network expansion.